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September 16, 2013

What Nonprofits Want From Funders

Many find demand for their services outstrips what they can provide

Nonprofit organizations don’t expect foundations to solve all their problems, but they believe foundations could be a lot more helpful in certain critical areas, according to a survey by the Center for Effective Philanthropy.

CEP surveyed 121 nonprofit leaders, members of the organization’s Grantee Voice panel, whose goal is to help foundations and nonprofits to work together productively. These executive directors, presidents and CEOs represented organizations with between $100,000 and $100 million in expenses, and received some funding from foundations that give at least $5 million annually.

The survey found that just 52% of nonprofits' leaders believed their foundation funders were aware of the challenges their organizations faced.

Even fewer respondents thought foundation funders were as helpful as they could be. Only 31% believed foundations deployed their myriad resources to help them address their challenges, and 36% thought foundations shared knowledge about what similar grantees were doing to meet challenges.

Nonprofits are looking for specific kinds of assistance. Eighty percent of nonprofit leaders said their organizations needed help to meet demand for their services.

Indeed, the inability of many groups to meet growing demand for services has been has increased since the onset of the recession. The Nonprofit Finance Fund’s annual survey found that 52% of nonprofits could not meet demands for services in 2012, up from 44% in 2009.

Two-thirds of the 77% of nonprofit leader respondents who found use of technology to increase effectiveness a challenge wanted more help from their foundation funders.

Nonprofit leaders also felt foundations could step in to help them bolster their leadership skills. Seventy-three percent complained about lack of sufficient resources and opportunities to develop their leadership skills.

CEP said this was not an issue only for those leaders new to their roles. More than 40% of respondents reported they had been in their positions for 10 years or longer.

Pressure on nonprofits to grow or develop earned revenue has increased in recent years as government funding has been cut and competition has intensified.

Some nonprofits, for example, receive government funding to provide essential social services, such as housing or education. Others focus on local problems that government alone can’t address, with funding coming from individual or corporate donations and special events.

Eighty-five percent of nonprofit leaders for whose organizations earned revenue was important found this challenging. And the majority found it difficult to increase their earned revenue.

A number of respondents didn’t think foundations could help in this area, but the majority was seeking foundation help.

Nonprofit leaders said the hardest money to raise was that from foundations. Ninety percent of respondents found this challenging, and 72% said it was extremely challenging.

Similarly, 95% found securing both multiyear funding and general operating or unrestricted funds difficult, and about two-thirds said it was extremely hard.